 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Home
> News
& Events > Press Releases > 2002 |
| |
Teaneck, NJ — February 12, 2003 — Cognizant Technology Solutions Corporation (Nasdaq: CTSH), a leading provider of custom software development, integration and application outsourcing services, today announced financial results for the fourth quarter and year ended December 31, 2002.
Revenue for the fourth quarter increased to $67.0 million, up 54 percent from $43.5 million in the fourth quarter of 2001, and up 9% sequentially from the third quarter of 2002. On a GAAP basis, net income for the fourth quarter increased to $9.1 million, or $0.42 per diluted share. Pro forma earnings per share, which excludes $1.7 million in transaction costs related to the IMS Health exchange offer, was $0.49.
Gross margin was 46.0%, compared with 46.2% in the third quarter of 2002, and 49.4% in the year ago quarter. Operating margin for the quarter was 19.8%, compared to 19.8% in the third quarter of 2002 and 20.8% in the fourth quarter of 2001.
Revenue for the full year 2002 was $229.1 million compared to $177.8 million in 2001. On a GAAP basis, net income for 2002 increased to $34.6 million, or $1.63 per diluted share. Pro forma earnings per share, which excludes $1.7 million in transaction costs related to the IMS Health exchange offer recorded in the fourth quarter, was $1.71 per diluted share.
"The year 2002 was successful for Cognizant on almost all fronts," said Kumar Mahadeva, Chairman and Chief Executive Officer. "Foremost is our belief that we have firmly established Cognizant in the top tier of our peer group, widening the gap between ourselves and other competitors with the successful execution of our industry leading 4th Generation services model. In addition, we continue to benefit from the broad market acceptance of the offshore delivery model, which will fuel our growth in the years to come. This is best illustrated by the growing number of strategic client partnerships that we established over the course of the year, typically with larger companies that have embraced offshore outsourcing as a part of their own strategic initiatives. The growth opportunities with the many strategic clients we won during 2002 gives us a high degree of confidence in our outlook for 2003, as does the potential opportunities in our new deal pipeline which remains robust."
"Cognizant's business model continued to generate strong results, with our year-end cash position rising to over $126 million, which includes the generation of $57 million of cash from operations during 2002," said Gordon Coburn, Chief Financial Officer. "DSO, including unbilled receivables, improved further to 56 days, from 59 at the end of September and 64 at the end of June. Financial Services customers continue to account for a growing portion of our revenue mix, rising to 43% compared to 35% last quarter due to the ramp-up of several large customers. Total headcount increased to over 6,100, reflecting the strength of our business outlook for 2003. And finally, our existing clients remain highly satisfied as well, accounting for 85% of our business this quarter."
Conference Call
Cognizant will host a conference call
on February 12, at 5 PM. (EST) to discuss
the Company's quarterly results. To listen
to the call please dial 800-953-6584 domestic
and 706-645-0156 internationally. The
call will also be broadcast live via the
Internet at Cognizant's web site, www.cognizant.com.
Please go to the web site at least fifteen
minutes prior to the call to register,
download and install any necessary audio
software. A replay will be made available
on the web site at www.cognizant.com or
by calling 800-642-1687 and entering "7971735"
from two hours after the end of the call
until 11:59 p.m. (EST) on February 19,
2003. |
| |
About Cognizant
Cognizant Technology Solutions Corporation
(Nasdaq: CTSH) is a leading provider of
custom information technology design,
development, integration and maintenance
services. Focused on delivering strategic
information technology solutions that
address the complex business needs of
its clients, Cognizant provides applications
management, development, systems integration
and business process outsourcing services
through its onsite/offshore outsourcing
model.
Cognizant's more than 6,100 employees
are committed to partnerships that sustain
long-term, proven value for customers
by delivering high-quality, cost-effective
solutions through its development centers
in India and Ireland, and onsite client
teams. Cognizant maintains P-CMM and SEI-CMM
Level 5 assessments from an independent
third-party assessor and was recently
ranked as the top information technology
company in Forbes' 200 Best Small Companies
in America and in BusinessWeek's Hot Growth
Companies. Further information about Cognizant
can be found at http://www.cognizant.com.
|
| This press release
includes statements which may constitute
forward-looking statements made pursuant
to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.
Although Cognizant believes the expectations
contained in such forward-looking statements
are reasonable, it can give no assurance
that such expectations will prove correct.
This information may involve risks and uncertainties
that could cause actual results to differ
materially from the forward-looking statements.
Potential risks and uncertainties that could
cause or contribute to differences include,
but are not limited to: (i) the significant
fluctuations of Cognizant's quarterly operating
results caused by a variety of factors,
many of which are not within Cognizant's
control, including (a) the number, timing,
scope and contractual terms of application
design, development and maintenance projects,
(b) delays in the performance of projects,
(c) the accuracy of estimates of costs,
resources and time to complete projects,
(d) seasonal patterns of Cognizant's services
required by customers, (e) levels of market
acceptance for Cognizant's services, (f)
potential adverse impacts of new tax legislation,
and (g) the hiring of additional staff;
(ii) changes in Cognizant's billing and
employee utilization rates; (iii) Cognizant's
ability to manage its growth effectively,
which will require Cognizant (a) to increase
the number of its personnel, particularly
skilled technical, marketing and management
personnel, (b) to find suitable acquisition
candidates to support geographic expansion,
and (c) to continue to develop and improve
its operational, financial, communications
and other internal systems, in the United
States, India and Europe; (iv) Cognizant's
limited operating history with unaffiliated
customers; (v) Cognizant's reliance on key
customers and large projects; (vi) the highly
competitive nature of the markets for Cognizant's
services; (vii) Cognizant's ability to successfully
address the continuing changes in information
technology, evolving industry standards
and changing customer objectives and preferences;
(viii) Cognizant's reliance on the continued
services of its key executive officers and
leading technical personnel; (ix) Cognizant's
ability to attract and retain a sufficient
number of highly skilled employees in the
future; (x) Cognizant's ability to protect
its intellectual property rights; (xi) the
concentration of Cognizant's operations
in India and the related geo-political risks
of local and cross-border conflicts; (xii)
terrorist activity, the threat of terrorist
activity, and responses to and results of
terrorist activity and threats, including,
but not limited to, effects, domestically
and/or internationally, on Cognizant, its
personnel and facilities, its customers
and suppliers, financial markets and general
economic conditions; (xiii) the effects,
domestically and/or internationally, on
Cognizant, its personnel and facilities,
its customers and suppliers, financial markets
and general economic conditions arising
from hostilities involving the United States
in Iraq or elsewhere; and (xiv) general
economic conditions. Such forward-looking
statements include risks and uncertainties;
consequently, actual transactions and results
may differ materially from those expressed
or implied thereby.
Additional information on factors that
may affect the business and financial
results of the companies can be found
in filings of the companies made from
time to time with the Securities and Exchange
Commission.
|
| COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) |
| (In thousands, except
per share data) |
| |
Three Months Ended |
Nine
Months Ended |
|
December 31, |
December
31, |
|
2002 |
2001 |
2002 |
2001 |
| Revenues |
$62,147 |
$38,166 |
$208,657 |
$158,969 |
| Revenues-related party |
4,864 |
5,295 |
20,429 |
18,809 |
| Total revenues |
67,011 |
43,461 |
229,086 |
177,778 |
| Cost of revenues |
36,194 |
21,989 |
122,701 |
90,848 |
| Gross profit |
30,817 |
21,472 |
106,385 |
86,930 |
| Selling, general
and administrative expenses |
15,412 |
10,636 |
53,345 |
44,942 |
| Depreciation and amortization expense |
2,163 |
1,802 |
7,842 |
6,368 |
| Income from operations |
13,242 |
9,034 |
45,198 |
35,620 |
| Other income: |
|
|
|
|
| Interest income |
503 |
495 |
1,808 |
2,501 |
| Other expense, net |
(146) |
(163) |
(235) |
(767) |
| Total other income |
357 |
332 |
1,573 |
1,734 |
| Income before provision for income
taxes |
13,599 |
9,366 |
46,771 |
37,354 |
| Provision for income taxes |
(2,780) |
(3,502) |
(10,529) |
(13,970) |
| Pro forma Net income (Excluding
split-off costs) |
10,819 |
5,864 |
36,242 |
23,384 |
| Impairment loss on Investment, net
of tax benefit |
- |
(1,224) |
- |
(1,224) |
| Split-off costs, net of tax benefit |
(1,680) |
- |
(1,680) |
- |
| Net income |
9,139 |
4,640 |
34,562 |
22,160 |
| Pro forma Basic EPS (Excluding
split-off costs) |
0.53 |
0.30 |
1.84 |
1.23 |
| Pro forma Diluted EPS (Excluding
split-off costs) |
0.49 |
0.29 |
1.71 |
1.15 |
| Basic earnings per share |
0.45 |
0.24 |
1.75 |
1.17 |
| Basic earnings per share |
0.45 |
0.24 |
1.75 |
1.17 |
| Diluted earnings per share |
0.42 |
0.23 |
1.63 |
1.09 |
| Weighted average number of common
shares outstanding |
20,225 |
19,283 |
19,747 |
19,017 |
| Weighted average number of common
and dilutive shares outstanding |
21,896 |
20,284 |
21,231 |
20,371 |
|
| |
| COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
(Unaudited) |
| (In thousands) |
| |
December
31, 2002 |
December
31, 2001 |
| Assets |
| Current Assets |
|
|
| Cash and cash equivalents |
$126,211 |
$84,977 |
| Trade accounts receivable, net
of allowances of $861 and $882 respectively |
35,092 |
21,063 |
| Trade accounts receivable - related
party |
1,605 |
1,481 |
| Unbilled Accounts Receivable |
4,159 |
5,005 |
| Unbilled Accounts Receivable -
related party |
149 |
417 |
| Current tax asset |
3,711 |
1,451 |
| Other current assets |
4,907 |
2,941 |
| Total Current Assets |
175,834 |
117,335 |
| Property and equipment - net |
39,090 |
24,339 |
| Goodwill - net |
878 |
878 |
| Other Intangible assets - net |
12,870 |
|
| Other assets |
2,801 |
2,431 |
| Total Assets |
231,473 |
144,983 |
| Liabilities
and Stockholders' Equity |
| Current Liabilities |
|
|
| Accounts payable |
$ 6,948 |
$ 3,652 |
| Accrued and other current liabilities |
34,539 |
18,046 |
| Total Current Liabilities |
41,487 |
21,698 |
| Deferred income taxes |
24,505 |
24,493 |
| Total Liabilities |
65,992 |
46,191 |
| Stockholders' Equity |
165,481 |
98,792 |
| Total Liabilities
and Stockholders' Equity |
231,473 |
144,983 |
| *In
the first quarter, the Company began
to classify its investment in auction-rate
securities as short-term investments.
These investments were included
in cash and equivalents in previous
periods ($94.15) million as of December
31, 2004), and such amounts have
been reclassified in the accompanying
financial statements to conform
to the current period classification.
This change in classification had
no effect on the amounts of total
current assets, total assets, net
income or cash flow from operations
of the Company. |
|
| Contact |
Investors Contact |
Media Contact |
Gordon Coburn
Chief Financial Officer
201-678-2712 |
Gordon McCoun/Peter Schmidt |
Brian Maddox/Scot Hoffman
Financial Dynamics
212-850-5600
shoffman@fd-us.com |
|
|
|
|
|
|
|
|